To complete the model of international trade using the PPF, we must also use the idea of indifference curves. One of these curves represent:
A) a set of alternate quantities of both goods (sloped negatively), whereby consumers are equally satisfied in their level of utility gained.
B) consumers who are indifferent to everything.
C) producers who do not care which production method is chosen.
D) a fixed quantity of one good (such as wheat) and a varying amount of the other good.

Question

Quizplus · Accepted Answer

Indifference curves represent a set of alternate quantities of both goods, sloped negatively, whereby consumers are equally satisfied in their level of utility gained. This means that any point on the curve provides the same level of satisfaction, and moving along the curve represents substituting one good for the other while maintaining satisfaction.

To Complete the Model of International Trade Using the PPF